For some clients, money coaching can be a one-off service, while for others it can lead to a deeper planning relationship.StudioGraphic/iStockPhoto / Getty Images
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With more clients requesting a deeper dive into their relationship with money and their financial habits, some wealth management firms and advisors are augmenting their services by bringing financial coaches on board. The approach is proving useful for serving younger clients who are looking to build confidence or those navigating multiple financial priorities.
Last year, Markham-Ont.-based fee-only financial planning firm Objective Financial Partners Inc. added a money coach to its roster to complement the services its financial planners offer.
Thuy Lam joined the firm in December to offer both money coaching and financial planning; she had been seeking a change after almost a decade running her own business as a certified financial planner (CFP) and financial coach focused on female entrepreneurs.
Ms. Lam recognized a coaching opportunity in her practice when clients started telling her they felt as though they were talking to their therapist. She went on to develop a “money mindset” workshop and coaching process that she now applies in her financial coaching and planning practice.
As a money coach, Ms. Lam works with younger couples who are overwhelmed with competing financial priorities, those starting to grow and accumulate wealth, and individuals working through the financial aspects of leaving a relationship.
She also helps clients assess their cash flow and align spending, savings and investing to support their life transitions, goals and priorities, and she explores clients’ relationship with money and its impact on financial habits.
Where financial planning may focus on financial projections, retirement planning, tax and estate planning and insurance needs in the context of a client’s goals and circumstances, financial coaches often look at cash flow, budgeting, and building clients’ confidence around money.
Financial coaches can also help clients navigate financial literacy topics, gain clarity on their most important priorities, explore the emotional side of finances, and align their financial decision-making with their values.
The benefits of offering money coaching alongside traditional financial planning for wealth management firms include collaboration and the ability for the team to refer clients back and forth depending on their needs and the advisors’ areas of expertise, Ms. Lam says.
For some clients, coaching can be a one-off service, she says; for others, it can lead to a deeper financial planning relationship. Her firm charges $500 for a one-hour money coaching session and $1,500 for a more comprehensive financial mentorship package, which includes three coaching sessions.
The cost for financial planning consultations, on the other hand, starts at $1,500, with comprehensive financial plans priced north of $4,000.
“What’s beautiful is they don’t need to go to another company; they don’t need to go to another financial planner,” Ms. Lam. says. “We can have that continual service because once we’ve completed the financial coaching aspect of it, they’re able to have that continuation going into financial planning.”
While the current demand for financial coaching makes this a complementary service for financial planning teams, Ms. Lam adds that skills such as coaching also have the potential to add value for clients as some routine financial planning tasks become driven by software and artificial intelligence.
Russ Dyck, an advice-only CFP with Finovo Financial Planning in Calgary, says having baseline knowledge of financial coaching can be beneficial for advisors, depending on the client demographic with which they aim to work
Mr. Dyck began his career as a financial coach. Although there aren’t specific requirements to use the “financial coach” title, he took online courses through the U.S.-based Financial Coach Academy program before becoming a CFP. While he doesn’t currently offer financial coaching as a standalone service, he uses its principles and strategies to complement his financial planning practice.
As he works primarily with young professional couples, financial planning often requires delving into behavioural finance, he says, including achieving a deeper understanding of their priorities and values to help ease clients’ stress and anxiety around their finances.
“I have to help them decide what are the things that are going to be set aside for now or worked toward over the long-term, and what are the things they need to focus on now. That’s where I feel the coaching aspect best comes into play,” he says. “The demographic I’m working with now really needs that.”
From a business perspective, he says, the ability to offer services such as financial coaching and financial planning under one umbrella is useful.
Coaching is “a needed service for these young professionals that are already tapped out,” he says, and there’s a benefit to firms and advisors that can offer both.
London, Ont.-based Millen Wealth Advisors also made the move to add financial advisor and investment coach Guillaume Girard to its team in March. As a chartered financial analyst (CFA) with a background in portfolio management and investor coaching, Mr. Girard applies the behavioural finance theories he learned through the CFA program. He works with the firm’s mostly millennial clients to understand what’s driving and hindering their ability to achieve their investment goals, looking at factors such as bias and the impact of emotion on risk-taking.
Investment coaching is provided through the firm’s flat-fee financial planning option and its investment management services, in which the fee model is a percentage of assets under management.
During an investment planning meeting, Mr. Girard explores how a client’s past experiences around money and investing may have shaped their current beliefs; he then provides coaching around their goals and values and continues to provide coaching every quarter.
“That’s at the root of how we go about suggesting financial planning strategies, but it’s also very crucial to our investment proposal,” he says. “We integrate their biases as investors and their past experiences into the investment proposal,” which helps clients stick with the plan.
In one recent example, Mr. Girard was working on a financial plan for a high-earning millennial client who was considering a major career change that would affect their income.
While Mr. Girard says he enjoys crunching the numbers, there’s also a life-coaching element that’s central to this model of serving clients.
“They start asking you, ‘Where would I be the happiest?’ or ‘Where would I get the most fulfilment?’” he says.
“You’re getting them as close as possible to their values and what they care about, and showing them that, in both scenarios, they’re going to win.”
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